UBS is facing regulatory challenges after acquiring Credit Suisse.
The Swiss Financial Market Supervisory Authority (Finma) has suspended the annual approval of UBS's stabilization and emergency plans due to the complexities arising from the merger.
Finma has called for a comprehensive revision of UBS's crisis management strategies to ensure operational resilience.
The integration of Credit Suisse has created organizational and technical hurdles and placed new demands on regulatory authorities.
Finma has indicated that the existing emergency plans are inadequate and require substantial adjustments to maintain the bank's stability.
The directive emphasizes the need to revise UBS's accounting model and incorporate activities beyond systemically critical functions into emergency planning.
This revision is crucial for enhancing liquidity planning and refinancing capabilities.
The challenges posed by the merger have led to a reassessment of UBS's preferred resolution strategy, requiring standardization of group structures, processes, and IT platforms.
The focus is on liquidity and risk management, with an emphasis on swift and independent measures in crisis situations.
UBS is expected to prioritize liquidity-generating measures and enhance its stabilization plan.
The Bank for International Settlements (BIS) has highlighted the importance of robust risk monitoring and the limitations on the free transferability of capital and liquidity resources within banking groups.
UBS is already taking steps to address the required revisions to its emergency plans and develop more comprehensive resolution strategies.
The regulatory landscape for UBS has shifted significantly, and effective regulatory oversight is crucial for maintaining financial stability.